Work up your elevator pitch

By
Hezi Leibovich

July 12, 2013, 7:41 a.m.

As with a baseball, a business pitch has to be targeted to be effective. Here are eight ways to pitch in the zone.

All businesses, but start-ups in particular, need to keep moving to stay fresh and thrive. The move from idea to business is a big leap, but the step from business to an investment prospect may be an even bigger one. When you’re after funds for growth, it’s important to outline what these funds could mean for your business before you ask, and all of this information should fit neatly into a pitch.

As an entrepreneur and investor through our new incubator program, Sketchbook Ventures, I’ve been on both sides of a pitch and in 15 years I’ve picked up the core elements of what makes one good.

1. Open with a hook

So many emails have subject lines that deserve to be deleted before I read them, like ‘An Opportunity of a Lifetime’. Use a hook to engage the interest of an investor. Matt Dyer, founder of EatNow, had my attention with ‘Raising funds for Aussie start-up. Thirty per cent growth month on month.’ It was direct and made me want to know more.

2. Leverage your network

It pays to mention if you have a personal connection in common with the investor. Social capital helps boost your credibility in the initial part of the pitch, which is important to get the investor to the next stage.

3. Concisely explain what you do

Try to answer this in terms of the ‘problem’ your market has and how your business solves it. Identify your customer, the scale of the problem and the number of people who are likely to benefit from your business. Mention other businesses trying to solve this problem and how your solution is better.

Matt explained EatNow like this: “EatNow helps over 1,000,000 Australians avoid driving to their favourite takeaway store to pick up their dinner by delivering hot, local restaurant meals to their door for no extra charge, without having to pick up the phone. It's done fuss free through our website or app.”

4. Give projections

It’s easier to obtain funding if your business is picking up speed, because it means you need money for growth, not to cover a poor start. All investors love seeing a startup with momentum so explain how your business is travelling. Pick an area that’s growing fast, and positively.

I liked EatNow’s use of figures and its specific goal: “In the past 6 months, we've added 500,000 new users and 1000 new restaurants to our site and are looking at doubling that in the next 3 months.”

5. Boast about your talent

Highlight the talent of members of the team who have relevant experience, skills and networks to assure investors you have what it takes to make the business successful. Relevant is the key. Even if your CTO worked as a NASA engineer, don’t mention it unless in context.

Matt told me: “Our team includes a chief marketing officer of Australia's largest pizza franchise group and a CTO from a leading restaurant point-of-sale company.”

6. Prove your market

Investors love testimonials, research and high profile customers; these things are ‘social proof’ that the business works. EatNow included this in its pitch: “We already have over 300,000 active monthly customers with some of the CBD’s largest corporates using Eatnow daily to order group dinners to their offices.”

Be sure to mention media coverage or awards the business has received that enhances reputation. For EatNow this was: “You may have seen EatNow featured in BRW, as well as national newspapers. Our app reached #1 in its category in the Apple store and is a finalist in the Online Retailer Industry Awards for best mobile application.”

Any support for credibility is welcome so if your start-up has already used high profile advisers or investors with relevant experience, this proves someone is willing to put money and/or their name behind your business.

7. State what you want

Many entrepreneurs forget to be clear about what they want. Answer these questions: How much are you raising? What stage are you at (seed, series A, series B etc)? Timelines set clear expectations to potential investors.

If your pitch is opportunistic or conducted via email or similar, you should meet to provide further detail. Although you’re likely to be the one to accommodate the investor's schedule, suggesting a date and time shows initiative.

8. Be ready

In the last year alone I’ve heard more than 50 pitches given everywhere from the boardroom to the supermarket, and even in a bathroom at a conference. When an opportunity presents itself you need to be prepared. Keep you pitch adaptable for different contexts and short, just in case you do meet a potential investor in the proverbial elevator.

Developing a pitch based on these elements is not difficult, but preparation and practice allow you to increase your hit rate with investors. And when you outgrow that stage, make sure you have a pitch that is able to hit the next target in your sights.

* Some details of the EatNow pitch have been altered for confidentiality.